Sticky Prices Versus Monetary Frictions: An Estimation of Policy Trade-offs
---- Acknowledgements -----
Previous versions of this paper circulated as "Insights from an Estimated Search-Based Monetary Model with Nominal Rigidities''. We thank Randy Wright for valuable discussions and Sanjay Chugh, Kai Christoffel, Peter Ireland, Chris Otrok, Giorgio Primiceri, Alex Wolman, as well as seminar participants at various institutions and conferences for helpful comments. Maxym Kryshko provided excellent research assistance. Schorfheide gratefully acknowledges financial support from the Alfred P. Sloan Foundation and the National Science Foundation under Grant SES 0617803. The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research.